Struggling clothing and footwear retailer Superdry (SDRY) has reported a ‘tough’ start to its new financial year blighted by extreme weather across the UK and Europe and ‘challenging and unpredictable’ retail market conditions.

The hard-pressed hoodies, jackets and sweatshirts seller also warned investors not to expect ‘significant revenue growth’ in the current financial year as management focuses on cutting costs and enhancing margins.

The downbeat outlook accompanied delayed annual results showing a lurch to statutory pre-tax losses of £148.1 million from a £22.4 million pre-tax profit a year earlier, struck after adjustments including store asset write-downs.

Shares in Superdry, whose founder and CEO Julian Dunkerton is attempting to fashion a turnaround, have fallen some 95% over the past five years.

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TOUGH TRADING CONTINUES

Group sales nudged up 2.1% to £622.5 million in the year ended 29 April 2023, with robust retail growth of 14.6% helping to offset a 19.1% decline in Superdry’s wholesale business, which ‘continues to be impacted by a more cautious outlook from partners’.

This delayed wholesale recovery, combined with the return to normal rent and business rates, impacted Superdry’s underlying profitability, resulting in a swing from adjusted pre-tax profits of £21.6 million to an adjusted pre-tax loss of £21.7 million.

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Superdry also flagged a tough start to the new year, with group sales down 18.4% in the first quarter amid lower demand for its Spring/Summer collection due to extreme weather across and a later start to its end-of-season sale, though full price sales and the retailer’s cost efficiency programme are driving margin improvements.

WHAT DID DUNKERTON SAY?

Commenting on a difficult year for the business, Dunkerton said Superdry has ‘taken decisive actions to improve our position, rebuild liquidity, and recapitalise our balance sheet, through careful preservation of cash and a re-engineered cost base.

‘The good news is that despite the external turbulence, the brand is in sound health and has momentum. Stores and ecommerce delivered a strong sales performance, and I’m excited by our collections for the Autumn/Winter 23 season.’

Dunkerton conceded wholesale remains ‘very challenging’, but he is excited by Superdry’s new partnership in Asia with Cowell Fashion that has helped rebuild the balance sheet and will ‘ensure Superdry can achieve its potential as a truly global brand.’

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